Sahara urges Sebi to verify repayments to investors

NEW DELHI: Caught in a legal battle with Sebi and directed by the Supreme Court (SC) to refund Rs 19,000 crore to investors by depositing this amount with the market regulator, Sahara has asked for the appointment of a credible agency to verify the authenticity of claims of repayment made by the two Sahara companies - Sahara India Real Estate Corporation and Sahara Housing Investment Corporation.

Asked how the company proposed to meet the SC order and make repayments, a company executive said there were "huge redemption pressures" following the Sebi case and the two companies have already repaid bulk of the investments with these two companies . Now, this claim has become a case of their word against Sebi's claims, it was best to have "a credible agency to verfy our claims." He added that the agency should have not just members from Sebi but Sahara too. "Or else, there will be great difficulties in detecting the thousands of small investors who showed faith and put money with us and whom we have always repaid when they asked for their money." Only a transparent process of indentifying investors and checking out repayments would be fair to investors and to the spirit of the SC verdict, he said.

He added: "Sahara has produced auditors' certificate for the amount of outstanding liability . We are proposing that Sebi should publish public notices in newspapers, at least twice in 10 days, inviting claims of remaining claimants . This will make things crystal clear...We have to finish repayments fast or else repayments to remaining investors would be at the rate of 15% interest, while the money with us is earning just about 9%."

Asked why anyone would be convinced of Sahara's repayment claims, the spokesman said: "That's why we are asking for a credible agency to verify them... All our branch managers have given notarized certificate about the repayments and with a declaration that each and every investor can be produced if the need arises."

Asked about its claims of redemption pressures, the spokesman explained that since "April-May we are facing big problems and pressures across India following the SC order." Saying that this was not unexpected, the spokesman said that the Sahara companies have made immediate repayments as non-payment could have jeopardized the field agents "who live among the investor classes."

Unlike banks, Sahara raises money from poor people in remote areas where the banking network barely exists, the spokesman said. "These are usually not people who can provide KYC requirements. And yet is the security we provide to them that has created faith among millions of investors in Sahara. Part of the security also comes from our practice of making prompt repayment when a demand is raised. It is because of this that there has hardly been an investor complaint against us in all these years."

For a long time now, the real estate industry has been pitching for an industry status for the sector. According to Ajay Maken, the Union Minister for Housing and Poverty Alleviation, this will improve the access to funding and help in creating more affordable housing stock in the country.

PUNE: Development of high-end real estate projects and resort style residential complexes have the potential to drive the growth of the sport of golf in India, participants in the second India Golf Expo said on Thursday.

There is a worrisome trend today. People take loans to acquire properties - not just for home for self use, but for investment in home and land. The current thinking among most investors is that property is the only asset that will give good returns. One may wonder - what is so worrisome about this? The point is that investors are going in for multiple properties, in many cases liquidating most of what they have and taking a loan for the rest.

If you are still waiting to buy your first house, the budget has some good news for you. The finance minister has extended an additional benefit of Rs 1 lakh on home loans up to Rs 25 lakh for first time property buyers.

in a move that may bring relief to developers, the Ministry of Housing & Urban Poverty Alleviation has decided to keep commercial offices and shops/malls out of the purview of the Real Estate (Regulation & Development) Bill.

For the real estate sector this budget didn't provide any proposals which could benefit the sector significantly. Additional interest deduction of Rs 1 lakh for low cost housing (where loan taken is less than Rs 25 lakh) in addition to the current deduction of Rs 1.5 lakh should be welcomed by the sector.

Bhubaneswar, Feb 28: Several industry and business organisations in the State Thursday showed mixed reaction to the Annual Budget 2013-14 presented by Finance Minister P Chidambaram, Thursday. While measures in the sectors of agriculture, rural development, education, health care and women empowerment were highly commended, little offerings to small and medium scale enterprises (SMSE) and failure of Government in controlling deficit financing were criticised.

MUMBAI/BANGALORE: Luxury homes for the rich would become more expensive after the finance minister today reduced the abatement on service tax availed by real estate developers for homes and flats above 2,000 sq ft or costing Rs 1 crore and above to 70% from 75% earlier.